Critical Leadership Succession Planning Issues for These Turbulent Times
All of our eyes are on Barack Obama, who today is being sworn in as president. His inauguration marks a huge transition in leadership, one that we hope will bring great change to this country. However, not all transitions in leadership are positive.
We have seen it happen so many times in the past few months: The CEOs of major financial institutions are suddenly ousted by the Board of Directors. Sometimes their poor judgment landed them in hot water; in other instances they are simply the wrong leader for these difficult economic times. These sudden leadership changes at the top are not only occurring in large financial institutions, and they are not all making headlines.
Regardless of the reason, sudden leadership changes can result in a loss of confidence by employees and shareholders. The fastest way to restore confidence is to have a successor ready to step in and lead the company through this economic downturn. So the big question is: Are you prepared for sudden leadership succession?
Generational Lapses in Business Leadership
Beyond the current economic turmoil, we are still facing predictions that Baby Boomers will be retiring in droves in the next five year and that there is a shortage of job candidates 35-50 years old to replace those Baby Boomers when they leave. So even if your leadership need is not as immediate today, what are you doing to build your leadership pipeline for the next five years? Have you:
- identified the key roles for which you need to plan for leadership succession?
- identified the leadership skills that are critical to your organization’s future success?
- identified potential talent in the workplace to fill your leadership pipeline?
- assessed potentional talent for skill gaps and placed them on an accelerated development plan to get them "ready now" for potential advancement?
- examined the external talent pool for potential leadership successors if you don’t have any currently ready talent?
Leaders Not Ready to Retire
And now for the real talent management quandary: What if you have carefully planned for succession and your senior leaders are ready to leave and give up their positions to the up-and-comers of the organization, and then they decide they can’t afford to leave? With a 40-50 percent drop in their investment portfolios, many executives who were looking forward to starting their retirement are now delaying those decisions because their overall financial worth has decreased to a point where they have to keep working. How do we keep those executives engaged in the workplace and not simply retired in place? Some considerations include:
- providing the opportunity for senior-executives to work part-time and mentor their replacements
- assigning executives to special assignments so that their positions can be freed up for those job candidates anticipating the promotion
With the right preparation, you can be sure that there will be no gaps in your leadership roles.
First published on the Human Resources IQ.